The other day, I walked into my local supermarket to buy five yogurt cups, a loaf of bread, a carton of strawberries, and a gallon of milk.
Now I may not be the most skilled person when it comes to mental math. But by my calculations, the sum of those items should not have exceeded $15. So when the cashier told me my total was $21, I asked her to make sure she didn’t double-scan something accidentally.
Nope.
Turns out, food is just ridiculously expensive these days. And if you run out of staple items at the wrong time, you could end up paying a small fortune to restock your pantry or fridge.
It’s for this reason that shoppers are increasingly turning to discount stores and grocers at a rapid rate.
Walmart, for example, has seen an increase in higher-income shoppers, as has Dollar Tree.
At a time when money is tight for so many people, companies like Costco need to be on high alert – especially when competitors make plans to grow their store footprint.
In December 2025, U.S. food inflation rose 0.7% from the previous month, marking the largest jump since late 2022, with overall annual food inflation at 3.1%, according to U.S. Bureau of Labor Statistics data.
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Aldi announces major expansion plans
Aldi recently announced plans to open more than 180 new stores by the end of the year. That initiative comes on the heels of a major expansion in 2025.
The company’s goal is to have 2,800 stores by the end of 2026 and 3,200 by the end of 2028.
Related: Costco makes big decision members will love
Aldi is specifically setting its sights on the following markets:
- Portland, Maine
- Denver
- Colorado Springs
- Phoenix
- Las Vegas
Aldi is also committed to continuing its Southeast expansion.
“One in three U.S. households shopped at ALDI this past year,* and in 2026 we’re focused on making it even easier for customers to shop our aisles first,” said ALDI U.S. CEO Atty McGrath. “That means bringing ALDI to even more neighborhoods, upgrading our website and planning additional distribution centers to keep our shelves stocked with the products our shoppers love.”
Aldi’s expansion could take more customers away from Costco
Aldi and Costco have some key similarities. Both stores emphasize savings and value, and both stores rely on private-label products to keep costs low for customers.
More than 90% of Aldi’s inventory consists of store-exclusive brands that offer big savings compared to national brands. Meanwhile, Costco commonly relies on its Kirkland Signature brand to offer high-quality products at a lower price point than national brands.
Related: Costco quietly added a major credit card perk
But one key difference between Aldi and Costco is that shoppers have to fork over an annual fee to get access to Costco’s warehouse clubs. And at a time when so many people are struggling financially, consumers may be less inclined to cough up the money for those fees.
While Costco enjoyed a 92.2% membership renewal rate in the U.S. and Canada during the first quarter of 2026, as the company reported on its last earnings call, it experienced a marginal slowdown in renewals compared to the previous quarter. And as consumers find themselves increasingly squeezed, they may be more inclined to turn to stores like Aldi to stretch their paychecks further.
Americans are struggling to afford groceries
- 88% of Americans have changed the way they grocery shop due to inflation. Source: Lending Tree
- American families spent an average of $310 more on groceries in 2025 compared to 2024, representing a 4% year-over-year increase. Source: U.S. Congress Joint Economic Committee
- Grocery prices rose 2.4% on a national scale in December 2025 compared to a year prior. Source: Consumer Price Index
- Grocery prices in the Western U.S. jumped 1.1% in December 2025, the largest monthly increase since 2022. Source: Axios
Costco may need to pivot
All told, Aldi’s increased presence in new markets could take business away from Costco in a meaningful way.
Let’s remember that it’s not just Costco’s membership fees that consumers might struggle with. Many also can’t afford to lay out the money to buy groceries and household essentials in bulk. At Aldi, they don’t have to.
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At the same time, Aldi’s aggressive expansion plans may inspire Costco to think even more creatively about ways to retain and attract members. That could lead to an even better shopping experience for those who continue to renew their memberships.
Maurie Backman owns shares of Costco.